Centre not to push for IDBI-Bank reverse merger

The government will not push for a reverse merger of Industrial Development Bank of India with its subsidiary IDBI Bank as the operations of the financial institution's subsidiary were not large enough to take care of its needs post merger.

Senior finance ministry officials told Business Standard that the government has decided to leave it to the wisdom of Parliament to chart out the future scope of activities of the development financial institution once the entity is corporatised.

Officials said Parliament, which is expected to discuss the IDBI (Repeal) Bill during the forthcoming winter session, will decide if IDBI would continue with its present mandate of development financing or will be converted into a retail or a corporate banking entity.

The sources also said that the government was not changing its position on permitting IDBI to undertake retail business.

"All this will be decided by Parliament. We will honour the recommendations of the Parliamentary standing committee and leave it to Parliament to decide the future course of action," an official said.